Agencies 'increasingly asked to work for free' due to economic woes

Digital and design agencies are increasingly being asked to work for free because of Britain's faltering economic recovery, a report published today claims.

Agencies squeezed as budgets run low

The Design Industry Voices survey of 496 agency staff paints a picture of the squeeze facing agencies as budgets are slashed by private and public sector clients.

· More than eight out of ten (85%) say that clients expect more work for less money

· More than seven out of ten (71%) say clients expect more work in pitches for free

· More than eight out of ten (82%) say client budgets have been reduced

· More than half say agencies are employing fewer permanent staff (58%), using more freelancers (55%) and more than two fifths are using more unpaid interns (43%).

Fewer than one in five respondents consider that their agency is performing ‘very well’ in respect of ‘helps employees to manage stress’ (12%), ‘rewards people for going the extra mile’ (15%) and provides ‘appropriate workload for staffing levels’ (15%).

The survey, now in its third year, was conducted by Fairley & Associates, Gabriele Skelton and On Pointe Marketing.

Rachel Fairley, MD of Fairley & Associates, said: “Digital and design agencies appear to be running on empty. Clients expect more work for less money to make up for budget cuts.

"Staff have disengaged; they are overworked, undervalued, and fed up of poor leadership. More of them than ever intend to change job within twelve months (58%), with far reaching consequences in this uncertain economic climate.”

Stef Brown, MD of On Pointe Marketing, added: "Clients are increasingly nervous that the ‘A’ team pitched, but an unstable ‘B’ team are delivering. And feeling like you aren’t on the ‘A’ team is demotivating, giving employees another reason to consider leaving.

"Not only this, but producing creative work for free during pitches means agencies are giving away their most valuable commodity: their intellectual property. I can't think of any other professional services business where this is tolerated, or even considered an option."